The Ghana cedi is expected to witness a single-digit depreciation against the US dollar in 2024, according to The Economist Intelligence Unit's recently released 2024 Africa Outlook Report.
The UK-based firm attributes the positive outlook for the cedi to the benefits derived from the International Monetary Fund (IMF) Programme.
The report indicates that only five African countries, namely Egypt, Sudan, Ethiopia, Angola, and Zimbabwe, are anticipated to experience double-digit depreciation of their currencies in the coming year.
The report highlights, “The Central and West African countries that make up the CFA franc zone will experience currency appreciation in 2024. The currencies of most other African countries will depreciate next year, with five experiencing double-digit depreciation: Egypt, Sudan, Ethiopia, Angola, and Zimbabwe.”
While forecasting currency depreciation against the US dollar across much of Africa in 2024, the report suggests that adjustments are expected to be less severe than those recorded in the previous year.
Meanwhile, in the current market scenario, the cedi is trading at ¢12.18 in the retail market, facing mounting pressure. High demand by corporates and importers in preparation for the Christmas festivities contributes to this pressure.
However, analysts anticipate a potential reduction in demand as the first tranche of the Cocoa Syndication Loan is expected to be received soon following parliamentary approval.
GCB Capital emphasizes that Cedi's outlook depends on the timing of the anticipated foreign exchange inflows from the cocoa syndication loan and the second tranche of the International Monetary Fund.
The investment bank deems these factors crucial for maintaining cedi stability for the remainder of the year.
As quarter 4, 2023 progresses, market observers anticipate that the inflows from the cocoa syndication loan and the second tranche of the International Monetary Fund bailout package will significantly influence the cedi's performance.
